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In the wake of the pandemic where many companies have extended the work from home for their employees till June, 2021; is it still advisable to continue staying on rent or buy a home for yourself. Today, this pandemic situation has made us all rethink the way we have been living or has changed the way we think or live. It’s what we call as “The New Normal”.
Consequently, homebuyers are looking to buy properties that are not only more spacious but also located in less populated areas, irrespective of their distance from the workplace. Everyone knows that buying a house is a long and stressful process — and that was the case long before “Covid-19” or “social distancing” became part of our everyday vocabulary.
Residential real estate is at its best now, with lower interest rates and a buyer’s market but this can change soon. No wonder, several surveys conducted by property consultants recently have revealed that housing enquiries have rebounded to 50% of pre-COVID-19 levels in the top cities and a majority of homebuyers are willing to return to the market in the coming months.
Some of the considerations that are worth looking at when looking at owning a property in these times:
Change in Trend
Owning a home is now considered as a sense of security and assurance, as against the risks of living in a rented space.
Stage of the Project
It will be favorable if the identified project is in advance stage of completion or be ready-to-move-in in next 12 months, to avoid any deferment in handing over.
Home Loan Interest Rates At Record Low
The Reserve Bank of India has reduced the repo rate on multiple occasions in the recent past, resulting in home loan interest rates plummeting to sub-7% levels. And with tax breaks the effective cost of borrowing is even lower.
Property Dynamics – To Rent or Buy
For last few years , investing in real estate was deferred because the three criteria’s were not so favorable : there was no capital gains / returns , a higher rate of interest on home loans and the belief that renting a house is cheaper than buying. However, the present pandemic situation is at the verge of changing this mindset and in some instances the change is already visible.
Stable / Marginally Increasing Property Prices
Buyers can expect property prices to remain stable in this scenario for the foreseeable future while in some specific cases the prices have risen marginally.
Prevailing low-interest rates may entice someone who has been either looking to buy his/ her first house or looking to upgrade to a bigger house. Favorable payment terms from developers have reduced the risk for buyers.
However, the decision to buy a house needs careful consideration, especially at a time when income levels were falling because of COVID lockdown, and rental yields are still attractive / cheaper than home loan rates.
For those who are experiencing some financial stress, the decision to buy a home can be deferred until they see stabilization in cash flows, and they could be better off staying on rent or renegotiating their monthly rent.
For others, this could be the time you been waiting for.
Owning a home has its own reasons — one being the pride of home ownership. However, every time may not be opportune for buying a home.